The role of transition-metal d and ligand p hybridization continues to be of immense interest in Li-ion battery cathode, and yet it is still poorly understood. Using combined experimental and theoretical soft X-ray absorption spectroscopic study and density functional theory calculation, we investigated the fundamental electronic structure of the high-voltage spinel LiNixMn2-xO4. An oxygen-participating charge rebalance between manganese and nickel ions was found; that is, the content of O 2p holes close to the Fermi level increases along with the increasing Ni content. Moreover, these unstable oxygen holes primarily congregate around the redox active dopants. The underlying mechanism accounting for this charge-compensated occurrence is the reverse of two bonding levels when manganese ions are oxidized from +3 to +4 states. On the basis of these new findings, we further exposed the role of oxygen in electrochemical performance. First, oxygen ions afford the charge variation together with the cations during Li insertion/deinsertion process. Second, the O 2p holes can largely screen the strong electrostatic repulsion between Mn4+ and Li+ ions to effectively enhance the rate capacity. Lastly, the excessive amount of O 2p holes is disadvantageous to the thermal stability associated with the O-2 evolution. Also, we point out that O 2p holes concentration can be modified by the metal-oxygen bonding character, and the "charge-transfer energy" is a crucial point for designing high-capacity positive electrodes for Li-ion battery.